US – Golden Entertainment falls slightly in third quarter but highlights positive future for the Strat

Golden Entertainment’s third quarter 2023 revenues fell slightly to $257.7m in the third quarter, from $279m for the third quarter of 2022 but the operator of nine casino resorts in Nevada has its eyes firmly fixed on greater footfall around its iconic Las Vegas landmark The Strat with the December opening of Fontainebleau.

Revenues grew by eight per cent at The STRAT, with adjusted earnings increased to 16 per cent based on improved occupancy, leading to higher spending on gaming and food and beverage. Occupancy came in at 75 per cent during the quarter compared to 68 per cent a year ago at The Strat.

Charles Protell, President and CFO, also highlighted that the Strat would benefit from Las Vegas’ F1 race and the Super Bowl, along adjacent Atomic Golf.

Mr Protell said: ““With renovations to our 1,300 rooms, casino, pool, entertainment, and restaurants, we feel the property is well positioned to capitalize on the high-traffic events coming to Vegas over the coming quarters and beyond. In addition, Atomic Golf, a $75 million golf entertainment complex behind The STRAT, is on track to open in January, which will further drive visitation and spending at the property.”

Declines in revenues and Adjusted EBITDA were primarily due to the exclusion of full quarter results for the company’s Rocky Gap Casino Resort and the Montana distributed gaming business that were sold during the third quarter.

The third quarter of 2023 results only include 24 days of operations for the Rocky Gap Casino Resort and do not include 18 days of operations for distributed gaming operations in Montana when compared to the prior year. In addition, earnings for the quarter include the impact of the $305.8 million gain on the sales of the Rocky Gap Casino Resort and the Montana distributed gaming business as well as transaction costs of $8.6m recognized during the quarter.

Blake Sartini, Chairman and Chief Executive Officer of Golden, commented: “For our third quarter, we saw improved performance in our Nevada Casino Resorts segment which was primarily driven by increased occupancy and our recent completion of room and pool renovations at The STRAT. Our Nevada Locals Casinos segment maintained the strong performance we have seen throughout the year, while our taverns experienced typical seasonality with lower summer volumes. Following our divestiture of Rocky Gap Casino Resort in July, we completed the sale of our Montana distributed gaming business in September and we remain on track to complete the sale of our Nevada distributed gaming business at the end of the year. The completion of these transactions significantly strengthens our balance sheet, enables return of capital to shareholders and provides financial flexibility to enhance shareholder value.”

“Growth in our Las Vegas properties offset lower revenue and EBITDA at our Pahrump properties, which were largely impacted by summer monsoons that closed a major highway connecting California through Death Valley,” Mr. Protell added. “The strength of the Las Vegas economy continues to support a healthy and growing database of core customers.”

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